83 FR 31148 - Announcement of Financial Sector Liabilities

FEDERAL RESERVE SYSTEM

Federal Register Volume 83, Issue 128 (July 3, 2018)

Page Range		31148-31149
FR Document		2018-14241
Federal Register, Volume 83 Issue 128 (Tuesday, July 3, 2018)
[Federal Register Volume 83, Number 128 (Tuesday, July 3, 2018)]
[Notices]
[Pages 31148-31149]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-14241]


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FEDERAL RESERVE SYSTEM

[Docket No. OP-1612]


Announcement of Financial Sector Liabilities

    Section 622 of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act, implemented by the Board's Regulation XX, prohibits a 
merger or acquisition that would result in a financial company that 
controls more than 10 percent of the aggregate consolidated liabilities 
of all financial companies (``aggregate financial sector 
liabilities''). Specifically, an insured depository institution, a bank 
holding company, a savings and loan holding company, a foreign banking 
organization, any other company that controls an insured depository 
institution, and a nonbank financial company designated by the 
Financial Stability Oversight Council (each, a ``financial company'') 
is prohibited from merging or consolidating with, acquiring all or 
substantially all of the assets of, or acquiring control of, another 
company if the resulting company's consolidated liabilities would 
exceed 10 percent of the aggregate financial sector liabilities.\1\
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    \1\ 12 U.S.C. 1852(a)(2), (b).
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    Pursuant to Regulation XX, the Federal Reserve will publish the 
aggregate financial sector liabilities by July 1 of each year. 
Aggregate financial sector liabilities equals the average of the year-
end financial sector liabilities figure (as of December 31) of each of 
the preceding two calendar years.

FOR FURTHER INFORMATION CONTACT: Sean Healey, Supervisory Financial 
Analyst, (202) 912-4611; Matthew Suntag, Counsel, (202) 452-3694; for 
the hearing impaired, TTY (202) 263-4869.

Aggregate Financial Sector Liabilities

    Aggregate financial sector liabilities is equal to 
$20,283,121,945,000.\2\ This measure is in effect from July 1, 2018 
through June 30, 2019.
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    \2\ This number reflects the average of the financial sector 
liabilities figure for the year ending December 31, 2016 
($20,079,196,276,000) and the year ending December 31, 2017 
($20,487,047,614,000).
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Calculation Methodology

    Aggregate financial sector liabilities equals the average of the 
year-end financial sector liabilities figure (as of December 31) of 
each of the preceding two calendar years. The year-end financial sector 
liabilities figure equals the sum of the total consolidated liabilities 
of all top-tier U.S. financial companies and the U.S. liabilities of 
all top-tier foreign financial companies, calculated using the 
applicable methodology for each financial company, as set forth in 
Regulation XX and summarized below.
    Consolidated liabilities of a U.S. financial company that was 
subject to consolidated risk-based capital rules as of December 31 of 
the year being measured, equal the difference between its risk-weighted 
assets (as adjusted upward to reflect amounts that are deducted from 
regulatory capital elements pursuant to the Federal banking agencies' 
risk-based capital rules) and total regulatory capital, as calculated 
under the applicable risk-based capital rules. Companies in this 
category include (with certain exceptions listed below) bank holding 
companies, savings and loan holding companies, and insured depository 
institutions. The Federal Reserve used information collected on the 
Consolidated Financial Statements for Holding Companies (FR Y-9C) and 
the Bank Consolidated Reports of Condition and Income (Call Report) to 
calculate liabilities of these institutions.
    Consolidated liabilities of a U.S. financial company not subject to 
consolidated risk-based capital rules as of December 31 of the year 
being measured, equal liabilities calculated in accordance with 
applicable accounting standards. Companies in this category include 
nonbank financial companies supervised by the Board, bank holding 
companies and savings and loan holding companies subject to the Federal 
Reserve's Small Bank Holding Company Policy Statement, savings and loan 
holding companies substantially engaged in insurance underwriting or 
commercial activities, and U.S. companies that control insured 
depository institutions but are not bank holding companies or savings 
and loan holding companies. ``Applicable accounting standards'' is 
defined as GAAP, or such other accounting standard or method of 
estimation that the Board determines is appropriate.\3\ The Federal 
Reserve used information collected on the FR Y-9C, the Parent Company 
Only Financial Statements for Small Holding Companies (FR Y-9SP), and 
the Financial Company Report of Consolidated Liabilities (FR XX-1) to 
calculate liabilities of these institutions.
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    \3\ A financial company may request to use an accounting 
standard or method of estimation other than GAAP if it does not 
calculate its total consolidated assets or liabilities under GAAP 
for any regulatory purpose (including compliance with applicable 
securities laws). 12 CFR 251.3(e). In previous years, the Board 
received and approved requests from eleven financial companies to 
use an accounting standard or method of estimation other than GAAP 
to calculate liabilities. Ten of the companies are insurance 
companies that report financial information under Statutory 
Accounting Principles (``SAP''), and one is a foreign company that 
controls a U.S. industrial loan company that reports financial 
information under International Financial Reporting Standards 
(``IFRS''). For the insurance companies, the Board approved a method 
of estimation that was based on line items from SAP-based reports, 
with adjustments to reflect certain differences in accounting 
treatment between GAAP and SAP. For the foreign company, the Board 
approved the use of IFRS. These companies continue to use the 
previously approved methods. The Board did not receive any new 
requests this year.
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    Section 622 provides that the U.S. liabilities of a ``foreign 
financial company'' equal the risk-weighted

[[Page 31149]]

assets and regulatory capital attributable to the company's ``U.S. 
operations.'' Under Regulation XX, liabilities of a foreign banking 
organization's U.S. operations are calculated using the risk-weighted 
asset methodology for subsidiaries subject to risk-based capital rules, 
plus the assets of all branches, agencies, and nonbank subsidiaries, 
calculated in accordance with applicable accounting standards. 
Liabilities attributable to the U.S. operations of a foreign financial 
company that is not a foreign banking organization are calculated in a 
similar manner to the method described for foreign banking 
organizations, but liabilities of a U.S. subsidiary not subject to 
risk-based capital rules are calculated based on the U.S. subsidiary's 
liabilities under applicable accounting standards. The Federal Reserve 
used information collected on the Capital and Asset Report for Foreign 
Banking Organizations (FR Y-7Q), the FR Y-9C and the FR XX-1 to 
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calculate liabilities of these institutions.

    By order of the Board of Governors of the Federal Reserve 
System, acting through the Director of Supervision and Regulation 
under delegated authority, June 27, 2018.
Ann Misback,
Secretary of the Board.
[FR Doc. 2018-14241 Filed 7-2-18; 8:45 am]
 BILLING CODE P
Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices 31149

assets and regulatory capital attributable Management and Budget, New credit information, 2.5 hours; Record
to the company’s ‘‘U.S. operations.’’ Executive Office Building, Room 10235, retention (applications, actions, and
Under Regulation XX, liabilities of a 725 17th Street NW, Washington, DC prescreened solicitations), 8 hours;
foreign banking organization’s U.S. 20503 or by fax to (202) 395–6974. Information for monitoring purposes,
operations are calculated using the risk- SUPPLEMENTARY INFORMATION: On June 0.25 hours; Rules on providing appraisal
weighted asset methodology for 15, 1984, the Office of Management and reports (providing appraisal report), 3
subsidiaries subject to risk-based capital Budget (OMB) delegated to the Board hours; Self-testing: Record retention—
rules, plus the assets of all branches, authority under the Paperwork incentives, 2 hours; Self-testing: Record
agencies, and nonbank subsidiaries, Reduction Act (PRA) to approve of and retention—self-correction, 8 hours; and
calculated in accordance with assign OMB control numbers to Self-testing: Record retention—rules
applicable accounting standards. collection of information requests and concerning requests for information
Liabilities attributable to the U.S. requirements conducted or sponsored (disclosure for optional self-test), 3.5
operations of a foreign financial by the Board. Board-approved hours.
company that is not a foreign banking collections of information are Estimated annual burden hours:
organization are calculated in a similar incorporated into the official OMB Notifications, 68,976 hours; Furnishing
manner to the method described for inventory of currently approved of credit information, 28,740 hours;
foreign banking organizations, but collections of information. Copies of the Record retention (applications, actions,
liabilities of a U.S. subsidiary not Paperwork Reduction Act Submission, and prescreened solicitations), 7,664
subject to risk-based capital rules are supporting statements and approved hours; Information for monitoring
calculated based on the U.S. collection of information instrument(s) purposes, 2,874 hours; Rules on
subsidiary’s liabilities under applicable are placed into OMB’s public docket providing appraisal reports (providing
accounting standards. The Federal files. The Board may not conduct or appraisal report), 34,488 hours; Self-
Reserve used information collected on sponsor, and the respondent is not testing: Record retention—incentives,
the Capital and Asset Report for Foreign required to respond to, an information 184 hours; Self-testing: Record
Banking Organizations (FR Y–7Q), the collection that has been extended, retention—self-correction, 184 hours;
FR Y–9C and the FR XX–1 to calculate revised, or implemented on or after and Self-testing: Record retention—rules
liabilities of these institutions. October 1, 1995, unless it displays a concerning requests for information
By order of the Board of Governors of the currently valid OMB control number. (disclosure for optional self-test), 3,864
Federal Reserve System, acting through the Final approval under OMB delegated hours.
Director of Supervision and Regulation under authority of the extension for three General description of report: The
delegated authority, June 27, 2018. years, without revision, of the following Equal Credit Opportunity Act (ECOA)
Ann Misback, report: was enacted in 1974 and is
Secretary of the Board. Report title: Recordkeeping and implemented by the CFPB’s Regulation
[FR Doc. 2018–14241 Filed 7–2–18; 8:45 am] Disclosure Requirements Associated B for institutions the Board supervises.1
with Consumer Financial Protection The ECOA prohibits discrimination in
BILLING CODE P
Bureau’s (CFPB) Regulation B (Equal any aspect of a credit transaction
Credit Opportunity Act). because of race, color, religion, national
FEDERAL RESERVE SYSTEM Agency form number: FR B. origin, sex, marital status, age (provided
OMB control number: 7100–0201. the applicant has the capacity to
Agency Information Collection Frequency: Monthly; annually. contract), or other specified bases
Activities: Announcement of Board Respondents: State member banks; (receipt of public assistance, or the fact
Approval Under Delegated Authority subsidiaries of state member banks; that the applicant has in good faith
and Submission to OMB subsidiaries of bank holding companies; exercised any right under the Consumer
U.S. branches and agencies of foreign Credit Protection Act (15 U.S.C. 1600 et
AGENCY: Board of Governors of the banks (other than federal branches, seq.)). To aid in implementation of this
Federal Reserve System. federal agencies, and insured state prohibition, the statute and regulation
SUMMARY: The Board of Governors of the branches of foreign banks); commercial subject creditors to various mandatory
Federal Reserve System (Board) is lending companies owned or controlled disclosure requirements, notification
adopting a proposal to extend for three by foreign banks; and organizations provisions informing applicants of
years, without revision, Recordkeeping operating under section 25 or 25A of the action taken on the credit application,
and Disclosure Requirements Federal Reserve Act (12 U.S.C. 601– provision of appraisal reports in
Associated with Consumer Financial 604a; 611–631). connection with mortgages, credit
Protection Bureau’s (CFPB) Regulation B Estimated number of respondents: history reporting, monitoring rules, and
(Equal Credit Opportunity Act) (FR B; Notifications, furnishing of credit recordkeeping requirements. These
OMB No. 7100–0201). information, record retention requirements are triggered by specific
FOR FURTHER INFORMATION CONTACT: (applications, actions, and prescreened events and disclosures must be
Federal Reserve Board Clearance solicitations), information for provided within the time periods
Officer—Nuha Elmaghrabi—Office of monitoring purposes, and rules on established by the statute and
the Chief Data Officer, Board of providing appraisal reports (providing regulation.
Governors of the Federal Reserve appraisal report), 958 respondents; Self- Legal authorization and
System, Washington, DC 20551 (202) testing: Record retention—incentives, 92 confidentiality: The CFPB is authorized
sradovich on DSK3GMQ082PROD with NOTICES

452–3829. Telecommunications Device respondents; Self-testing: Record to issue its Regulation B pursuant to its
for the Deaf (TDD) users may contact retention—self-correction, 23 authority to prescribe regulations to
(202) 263–4869, Board of Governors of respondents; and Self-testing: Record carry out the purposes of ECOA (15
the Federal Reserve System, retention—rules concerning requests for U.S.C. 1691b). The obligation to comply
Washington, DC 20551. information (disclosure for optional self- with the recordkeeping and disclosure
OMB Desk Officer—Shagufta test), 92 respondents.
Ahmed—Office of Information and Estimated average hours per response: 1 15 U.S.C. 1691. The CFPB’s Regulation B is

Regulatory Affairs, Office of Notifications, 6 hours; Furnishing of located at 12 CFR part 1002.

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Document Created: 2018-07-02 23:56:00
Document Modified: 2018-07-02 23:56:00
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Contact		Sean Healey, Supervisory Financial Analyst, (202) 912-4611; Matthew Suntag, Counsel, (202) 452-3694; for the hearing impaired, TTY (202) 263-4869.
FR Citation		83 FR 31148